Tandem acquires Harrods Bank
07 August 2017 | 13319 views | 1
Digital challenger Tandem has pulled off a huge deal to salvage its plans to move into the UK banking market by acquiring loss-making Harrods Bank.
Tandem's move propels the nascent startup ahead of its rivals, providing the firm with a £200 million loan book and £300 million in deposits.
The deal comes months after Tandem appeared to pivot from its original plans to launch a fully-licensed UK bank after losing out on a £29 million cash injection from Sanpower, the Chinese conglomerate which owns House of Fraser. The news was seen as a serious blow to Tandem's ambitions to launch as a full bank, forcing it to miss licencing deadlines imposed by the Prudential Regulatory Authority.
In a blog announcing the acquisition, Tandem states: "We can accelerate our launch plans and start offering savings accounts soon. We will continue developing and rolling out our app and credit card as planned, with a little more spring in our step. When the deal is finalised, we’ll operate the whole business under the Tandem brand."
The agreement is still subject to regulatory approval but Tandem expects the deal to be finalised in "a few months".
Owned by Qatar Holdings, Harrods Bank posted pre-tax losses of £8.4m 2016 on net income of £2.3 million.